19 February 2013: Nifty Elliott wave analysis: Recovery is coming with small volume so it may not have great life. As long as we are below 5940, every recovery can get sold at higher levels. Support at 5878 only.

You must read previous articles and watch the given chart carefully to understand this article completely.

For 19 February 2013: -

On 18 February 2013, FII bought INR 142.91 crs and DII sold INR 110.55 crs.

The way things are moving in recovery it is itself creating enough doubt. Yesterday market closed in green but it has traded with very thin volume and those were in very limited ranges. Day’s high-low might as 32 points practically Nifty was moving in just 10-15 points.

It is equally true that daily RSI has given some kind of positive divergence but it is not showing that it will give immediate impact. Still recovery is a part of market movement. Hourly chart has given double inside bar which is not a very encouraging pattern.

Market is not trying to take a call before budget. It is still very clear that the phase of extreme volatility will be back now. It may start trading with volatility from today after a day of silence. There is a band of 5940 to 5878 which will not give easy trades. Suppose, if Nifty trades below 5878 then it will give a push towards 100 SMA which is now at 5832.

I will not give edge for recovery as recovery is a tougher word for Indian market. This market has a chance of slipping in oversold zone too. Remember that nothing has extremely over sold. Look at US market those are rising from last more than one month in extremely over bought zone. My view is that this market is still short on rise.    

Strategy for Nifty February future – Nifty future has very sluggish trades yesterday but there were some impressive developments. Recent high was 5979 and low at 5858. It has almost retraced by 50% with yesterday’s rise. It is true that cross above 5922 will give levels of 5940-5950 levels but will it cross 5922? I will say wait-watch and short at high. In the downside if it sustain even below 5890 for 5-10 minutes then you can expect slide towards 5858. Remember, this market can fall from any levels anytime.

S&P 500 – It is patience testing deal now. This is something which is happening perhaps first time in multiple years. US indices were no such history. 20 EMA is now at 1503. I will again say that keep an eye on 1508 to bet for fall. Above 1500, firstly it has broad the ranges for trading and now narrowing. I am still puzzled. What will begin fall and how? Everything that goes higher has to come under gravity. Let us see. Every night I am hoping for fall but my waiting is turning longer.